Disgraced FTX founder Sam Bankman-Fried has been hit with four more brank fraud charges in a new indictment – which accuses him of posing as the ‘savior of the cryptocurrency industry.’
Court documents released on Thursday see Bankman-Fried charged with 12 offenses total, which now include making more than 300 illegal political donations totaling $100 million, bank fraud and operating an unlicensed money transmitter.
Prosecutors also accuse him of having a messiah complex and presenting himself as a ‘savior’ while boasting about FTX’s profits in a new indictment filed in a Manhattan federal court. It isn’t known if Bankman-Fried will return to New York for a further arraignment.
The crypto trader, 30, was first charged in December with eight criminal counts and was subsequently extradited from the Bahamas. His trial has been set for October 2023. The California-native has pleaded not guilty to all charges.
Bankman-Fried was already facing 115 years in prison, the new charges could bring an additional 40 years in prison, if he is convicted on all charges.
Court documents released on Thursday see Bankman-Fried charged with 12 offenses total, which now include bank fraud and operating an unlicensed money transmitter
The new allegations see Bankman-Fried accused of posting ‘a series of misleading tweets’ in the days leading up to FTX’s collapse. He’s also accused of attempting to buy political influence in both the Democratic and Republican parties.
The charges accuse Bankman-Fried of making more than 300 illegal political donations in the United States through his one-time girlfriend’s crypto-investment firm Alameda Research.
The donations, totaling tens of millions of dollars, were unlawful because they were attributed to a ‘straw donor’ or made using corporate funds, often allowing Bankman-Fried to evade contribution limits on individual contributions to candidates, prosecutors said.
FTX’s inner circle discussed contributions in an auto message deleting Signal chat group named ‘Donation Processing.’
‘[Bankman-Fried] caused substantial contributions to be made in support of candidates of both major political parties and across the political spectrum,’ the indictment reads.
The complaint goes on to accuse Bankman-Fried of not wanting to be associated with the left-wing of the Democratic Party or to ‘have his name publicly attached to Republican candidates’ and therefore GOP contributions were kept ‘dark.’
Prosecutors say this is why the FTX founder used ‘straw donor’ tactics, rerouting money through non-profits who do not disclose donors. The original indictment did not focus in on Bankman-Fried’s political activities.
Under orders from Bankman-Fried, an executive was charged with making a $1 million donation to a pro-LGBTQ super PAC.
‘In general, you being the center left face of our spending will mean you giving to a lot of woke s*** for transactional purposes,’ the company founder told the executive.
The executive said that he did not feel comfortable making the donation but conceded that there was nobody at FTX in a high enough position who was LGBTQ to make the contribution.
Prosecutors allege that much of the money used to make these donations was FTX’s customer’s money.
The other major political players within FTX were Bankman-Fried’s former co-chief executive officer Ryan Salame, who is a conservative, and former director of engineering, Nishad Singh, who is a liberal. Combined their donations during 2022 midterms amounted to over $70 million.
Superseding indictments are often used to add new defendants to a case, however no new defendants were named in the FTX case Thursday.
There are two unnamed co-conspirators cited in the new documents. Bankman-Fried is also accused of transmitting money illegally in the indictment.
The government also asks for a forfeiture of assets including assets held in a Binance account and 55 million shares in Robinhood Markets in addition to over $170 million in cash that is held in various different banks.
‘Exploiting the trust that FTX customers placed in him and his exchange, Bankman-Fried stole FTX customer deposits and used billions of dollars in stolen funds for a variety of purposes,’ one section of the filing read.
‘Contrary to Bankman-Fried’s promises to FTX customers that the exchange would protect their interests and segregate their assets, Bankman-Fried routinely tapped FTX customer assets to provide interest-free capital for his and Alameda’s private expenditures, and in the process exposed FTX customers to massive, undisclosed risk,’ prosecutors continued.
The former billionaire is accused of lying to the management of a US bank about the nature of an account that was being used for FTX customer’s deposits in order to circumvent standard banking practices.
After founding FTX in 2019, Bankman-Fried rode a boom in the value of Bitcoin and other digital assets to attain an estimated $26 billion net worth.
He became an influential figure in crypto technology in the United States until the exchange collapsed in November amid a flurry of customer withdrawals.
Bankman-Fried is accused of cheating investors and looting customer deposits on FTX. It’s allegedly one of the biggest frauds in U.S. history.
Bankman-Fried was ordered back in front of a judge this month after reports he broke his bail conditions, including using a VPN to use the internet and contacting the former general counsel of FTX
Twice in the last two weeks, he has appeared in court after prosecutors expressed concern that he might be communicating online in ways they cannot trace.
They have also said his communications indicate that he might be trying to influence a witness with incriminating evidence against him.
Prosecutors notified the judge on February 13 that Bankman-Fried used a virtual private network, or VPN, to access the internet twice in the last two weeks, including once after last Thursday’s hearing, which focused on restricting his communications.
The following day, Bankman-Fried’s attorneys — Mark Cohen and Christian Everdell — wrote to the judge to say their client will not use the VPN until the questions about it are resolved.
They defended his use of it, saying he accessed the VPN on Jan. 29 to watch NFL championship games that determine which teams go to the Super Bowl and for the Super Bowl.
Judge Lewis A. Kaplan is now deciding how to toughen Bankman-Fried’s bail requirements to prevent any improper communications.
Last week, he even suggested that Bankman-Fried might have to be incarcerated prior to trial if his communications cannot be monitored to ensure he is not tampering with witnesses.
FTX filed for bankruptcy on November 11 after it ran out of money in the cryptocurrency equivalent of a bank run.
Since December, Bankman-Fried has been confined with electronic monitoring to his parents’ home in Palo Alto, California, after his release on a $250 million personal recognizance bond.
Besides cheating investors, he’s also charged with using money he stole from investors to finance risky trades at Alameda Research, his cryptocurrency hedge fund trading firm.
Caroline Ellison started her trading career at Jane Street, a New York based firm, in 2018 before moving to Alameda Research in 2020 after meeting Bankman-Fried. She is among his former inner circle now said to be cooperating with prosecutors in a case against him
Gary Wang joined Ellison in pleading guilty to fraud charges, and he is expected to testify at Bankman-Fried’s upcoming trial
Singh was a school friend of Bankman-Fried’s younger brother and an employee of Facebook prior to his involvement with FTX
Carolyn Ellison, the 28-year-old former CEO of Alameda Research and Gary Wang, the 29-year-old who co-founded FTX, pleaded guilty to charges including wire fraud, securities fraud and commodities fraud in late December.
Ellison and Bankman-Fried were in an on-again/off-again romantic relationship.
‘They are both cooperating with the Southern District of New York,’ U.S. Attorney Damian Williams said in a video statement released on social media after the pleas.
He added that anyone else who participated in the fraud should reach out to his office because ‘our patience is not eternal’ and further criminal charges against others were possible.
Ellison and Wang signed plea agreements on Dec. 19, partially in exchange for a promise that prosecutors would recommend a reduction in their sentences if they cooperate fully in the investigation.
Without such a deal, Ellison, who also faces a money laundering conspiracy charge, could face up to 110 years in prison. Wang could get up to 50 years.
Both were released on $250,000 bail after their secret court appearances with travel restricted to the continental United States.
‘Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness,’ said Wang’s lawyer, Ilan Graff.